What is the Difference Between a Credit Union and a Bank?
- Author Diane Lorenzo
- Published March 3, 2013
- Word count 419
Banks and credit unions seem very similar to most people. They both offer deposit accounts and various types of credit. They have many of the same services, telephone banking, online banking and ATMs; but there are some major differences between the two. If you’re wondering where to turn for your next personal loan or aren’t sure where to open a savings account consider the following differences between a credit union and a bank.
Credit Unions
A Credit Union is a member-owned not-for-profit financial cooperative governed by a Board of Directors elected by the credit union’s members. The members of a credit union usually have something in common, such as living in the same geographical region or belonging to the same organization.
Credit Unions offer everything from checking and savings accounts to small business loans, car loans, mortgages, personal loans, and more. A credit union’s main focus, however, is on savings and it will usually offer higher interest on savings products than a bank. A credit union’s not-for-profit status means that any income it earns is given back to its members, usually via lower interest rates and fees.
Banks
A bank is a stockholder-owned financial institution. Its main goal is to make its investors money and it does so by investing its customer’s money or lending it to other customers. When you make a deposit at the bank you are essentially loaning money to it. The bank pays you back in interest for that loan but the rates vary depending on the bank (consider that 0.05% you’re now making on a savings account you opened several years ago when interest rates were much higher).
Banks also make their money in fees (ATM fees, overdraft fees, late payment fees, etc.).
Banks carry the same products as credit unions, deposit accounts, IRAs, credit cards, and so on, but unlike a credit union, a bank’s products are FDIC insured. (Credit unions are insured by the National Credit Union Administration (NCUA) so funds are still guaranteed should the credit union fail).
While it may seem that banks and credit unions both offer the same products and the only difference is in who owns them, credit unions lead the way when it comes to service. Surveys of bank customers and credit union members consistently show a higher rate of satisfaction among credit union members. And while banks are often able to provide more convenience, in that they typically offer more branch locations, customer satisfaction is not as high.
Cooperative Center Federal Credit Union is a member-owned and governed financial institution in Berkeley, CA. Call 510-845-6428 or visit www.coopfcu.org.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- What is an anal fissure and how to get rid of it
- What are the symptoms of anal fissure?
- What causes anal fissures?
- Port Orange -- The Perfect Twin Sister to Daytona Beach
- Luxury Travel in New Zealand: Your Comprehensive Guide to Indulgence
- Marketing Strategies for Mooncake Suppliers: Standing Out in a Crowded Market
- The Risks of Replacing Broken Garage Door Springs Yourself
- What to Do When Your Garage Door is Off Track
- Spring Clean Like a Pro
- Spring into Clean: Transform Your Home with Diamond Home Support Barking
- Spring Cleaning Magic: Unveiling a Fresher Home
- Top Cleaning Tips for the Spring
- The Lemon: Nature's Remarkable Cleaning Marvel
- How To Automate Affiliate Marketing?
- How To Activate Your Pineal Gland Fast?
- Effective Marketing Strategies for Tradies: Boost Your Business in 2024
- Which Prostate Supplement Is Best?
- How to make an unique baby room wall decoration?
- Top 10 Features You Didn't Know Existed in Product Configurators for Business Central
- 4-Day Paris Itinerary: A Female Traveler's Guide to Experiencing the City of Lights and Avoiding Common Mistakes
- Who Should Wear Oversized T-Shirts
- The Dos and Don'ts of Creating Engaging Online Content That Keeps Your Readers Coming Back
- Sapa Serenity: Trekking Through Vietnam's Rice Terraces
- Cyberbullying: Empowering Families to Safeguard Their Kids
- 7 Must-Know Tips for Helping Your Child During Their First Week with Braces
- Balancing Privacy and Authenticity in Your Online Dating Profile
- Project Managers & Stakeholders: Channels of Communication
- Choosing a Matching Front Door and Garage Door: Curb appeal—the whole facade of a house—should be in balance.
- Parental Alienation Syndrome: Recognizing Manipulative Behaviors and Protecting Children
- Daily Reflection: Cultivating Mindfulness Through Journaling